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An anonymous reader writes "Sen. Joe Manchin of West Virginia, a member of the Senate Banking Committee, has called for for heavily regulation of Bitcoin. Reached for comment, his staff confirmed Manchin is seeking a 'ban' that would apply to any cryptocurrency that's both anonymous and unregulated."

Can't the free market handle this? Do we really need yet more restrictive government regulations? What are they afraid of? Could untraceable cryptocurrencies somehow encourage people who don't have a lot of money to avoid taxes, similar to what our betters do right now with offshore tax havens?

No, he would also say that there are flaws, such as monopolies, that would also have to be watched and prevented.

Quite true. Didn't mean to imply Smith didn't recognize the flaws in market economies. Too bad the leadership in the US fails to recognize the flaws in so called free markets - particularly in the case of monopolies. [cbsnews.com]

i think it also has something to do with the fact that they need everyone to keep using US $'s. the ponzi scheme that is our current monetary system, only works if people keep believing their money has value and keep using it. the house of cards quickly collapses once enough people realize their money is only worth the paper it's printed on.

Nobody ever stops and asks the question "why must SOMETHING be done" and then try to figure out what that "SOMETHING" ought to be.

The problem here, is that we have people who no nothing, telling everyone else what to do. This is nothing short of tyranny. I just wonder how many people realize that those that are supposed to represent us, only represent themselves.

I don't get how buying and selling Bitcoins is any different than doing the same with Beanie Babies, Baseball Cards or mp3 files (that you have the right to sell).
What is the legal definition of "Cryptocurrency"? New ones are popping up all the time.
Where were the legislators crying for regulation when the bottom fell out of the Beanie Baby market?

The free market did handle it. And, in the case of Mt. Gox, was run on a hack version of sshd written in three days in php, and it looks like 750k or so bitcoins are gone, transferred to someone else without Evil Gov't And Company Interference.

And I suppose, if you have your ultra-free way, then I could hold you up at gunpoint, empty your wallet, force you to empty your bank account from the nearest ATM, and it would be up to you to round up a posse to find me.

No, Mt. Gox just lost (most probably) all of its currency. It is similar to a bank with insufficient security getting robbed. That is no reason to ban US dollars. BTW, those BTC are out there and will no doubt be spent over time.

, if I understand the Mt.Gox math properly (and even if I don't, the loss was significant). One of the reasons governments came into being -- one of the reasons most people tend to agree that they should exist, is to protect property rights. There may be nothing wrong with Bitcoin inherently (mathematically), but if there are holes in the faucets -- the bitcoin banking system in this case -- then it's in everyone's best interest to patch the holes.

Indeed. However, other exchanges were smart enough to protect against this well known technique. Mt. Gox is the equivalent of a bank with a faulty vault and no security guard. Rumor has it that Mt. Gox hadn't balanced its books for months. Inexcusable.

If someone steals my money, then the taxes I pay go, in part, to pay for the legal system, rules, and police whose job it is to try and get it back or at least punish those who took it.

Bitcoin has had four years of freedom, and it has proven that it is as susceptible to abuse as traditional cash currencies, if not more so. While I don't want to see it crushed, and I'm in favor of limited government oversight, it seems to me that those limits should be non-zero.

I'm expecting to see a new sport of theft-watching as enthusiasts peer through the block chain trying to work out where the coins are going. Whoever has them now is probably sensible enough to know they are too hot to spend. Laundering takes time, even with bitcoin.

This is like "A book is a secret until someone reads it." It is trivially easy to trace back an exchange. Unlike, for example, cash.

If you go to an exchange like Mt.Gox, possibly. But what if I just offer to do some sort of service for you, anything I could do over an open wifi and have you deposit BTC directly into my wallet? Assuming I use a single purpose deposit address and don't mix it with identifiable BTC there's no name attached to that account. And bitcoin to bitcoin transactions are anonymous. If I just transfer something to a different account, nobody can prove whether I just exchanged bitcoins with goods and services from so

you just described the case against allowing people to use cash. (you know, "folding money" as my grandparents called it)

Cash is anonymous, and is regulated only when it comes to transferring into or out of a bank (or if you try to import/export it overseas). By its very nature of being decentralized, cash cannot be regulated in any practical or meaningful way between two private parties, which is, in practice, effectively no different from the current crop of cryptocurrencies. The key difference is that ALL transactions in the Bitcoin protocol are public, and therefore Bitcoin is actually much less private than cash transactions.

If the senator truly wanted what he said he wanted, he would push to regulate or abolish the use of cash and demand electronic payments in all circumstances. It's more of a "problem" than bitcoin is. How often do you see huge stacks of millions or tens of millions of dollars in cash when there's some big cartel bust? None of that would be possible if cash was regulated and traceable. But no, it's Bitcoin that's the problem, according to this guy.

Then using a credit card is anonymous too. Until someone decides to trace back the transaction, and subpoena VISA for evidence of a connection to a person. There is no real technical difference between a VISA card number, and a Bitcoin wallet id - just that generally, VISA requires you to tell them who you are when you create an account. But that's not a technical feature of the payment system, just of the rules VISA happens to place around it.

Bitcoin is pseudonymous - all transactions are tied to a publicly-visible unique identifier. If it was anonymous (like cash is) then transactions would be tied to nothing identifiable.

He should really work on banning the USD. It's used for commission of trillions of dollars worth of crimes every year and there's no real means of enforcement for [bona fide] money laundering operations [trust.org].

On the plus side, we could 'regulate' Mt. Gox's little 'accidentally disappearing into the night with ~$350 million unaccounted for' misunderstanding with the same seriousness that we employed to show HSBC that (blue collar) Crime Does Not Pay (~0.001%, and no pesky criminal charges) for about $3,500. A Small Price To Pay For Rule Of Law!

Bitcoin isn't anonymous, though, and it is quite regulated. Bitcoin is arguably the least anonymous form of value transaction we have (every transaction is publicly and permanently recorded), and if you think it is unregulated try running an exchange anywhere in the Western world.

Personally, I think the first significant threat to bitcoin will be a cryptocurrency that really is anonymous.

Something to keep in mind: they can make Bitcoin flatly illegal, but development and usage will simply go underground and continue to grow outside the U.S./Russia/China. U.S. regulations delay adoption but do not prevent it.

You may feel it is ridiculous, but the regulatory pressure has been increasing all over the world. It is effectively banned from normal transactions in both China and Russia, and very tightly controlled here in the US. This isn't recent, but Congress is clearly not laughing at this point.Of course, I think you are also right. Lots of people still laugh, and Congress really doesn't yet have a clue as to what mayhem this magical mystery internet money could end up causing. To me, bitcoin is to banking wha

It depends on what you mean about "happy" about it. IF the US replaced the USD with Cryptocurrency, one that mirrored all the favorable things we love about crypto currency (namely finite number of coins), then Yeah, I would be "happy" about it. It would mean we would get away from Private organizations like the FED from printing money to cause inflation so that we can cover up the theft called "DEBT".

That alone would make me happy. It also means it won't actually happen, can't possibly happen with the two

You should, perhaps, go look at some history on what happened when we were on the gold standard. Want economic growth? Forget about it. Want a loan to start a new business, buy a house, keep your current business humming along? Not a chance, unless of course you think that loan shark interest rates are just way, way, too low.

A finite money supply means a finite economy, one that can't grow, and can't handle anything significant happening. It also means the wealthy will get more wealthy, and the poor

Exactly. And it has certain design criteria that make this a really interesting prospect. Unfortunately not enough people are interested in using it for this purpose, probably because they don't know enough about it, or don't trust it.

For example, I think it has potential for a "free" way to do high volume B2B settlement among international entities... but I never hear anyone talk about this.

Can someone please explain to me why a ban is the first option for some lawmakers who don't understand a certain advancement, technology or social issue. State governments seem to use the "ban it first, ask questions later" philosophy on anything they don't fully comprehend. If this keeps up we will soon start banning theoretical physics.

Can someone please explain to me why a ban is the first option for some lawmakers who don't understand a certain advancement, technology or social issue. State governments seem to use the "ban it first, ask questions later" philosophy on anything they don't fully comprehend. If this keeps up we will soon start banning theoretical physics.

The authoritarian leadership style [wikipedia.org] demands control and compliance. Doesn't matter whether you have an (R) or a (D) behind their name, a badge and a gun, or just a fancy ti

I'd usually ask what the hell is in the water down there for them to be pumping out (and electing, no less) such fine specimens of humanity; but seeing as this is West Virginia, and the locals get to ask the same question, often, would that be in poor taste?

Largely because I'm tired of hearing about it, moreover tired of hearing justifications for it based upon people who have no understanding of money outside of what some Austrian-economics kook told them.

I don't see why the government should worry about these cryptocurrencies. As long as they don't back the currency, then the whole market for that currency is "enter at your own risk" and people who decide to use it are (or should be) doing so fully aware of that fact. Regarding it being anonymous, isn't USD cash also anonymous? What's the difference? In fact, probably bitcoin is less anonymous than cash.

I don't personally like bitcoin and I have no desire nor reason to try to use it, but there's no g

The only way we're truly going to get a handle on this crime problem and protect the American people from themselves is to mandate installation of ROM-based drivers to report all keyboard presses, mouse events and screen gestures to the Department of Homeland Security's central analysis system where they can use Big Data Mining techniques to forewarn our protectors of imminent dangers to the public good.

This may, of course, require modifications to CPU hardware architecture to override any attempts to sub

He's a Democrat. You can tell that because they didn't post his party affiliation in the article. Had it been a Republican it would have read "Republican xyz who is a Republican from the Republican party did.......". To be honest, I'm surpised they didn't do the usual "Rep Joe Manchin" like they usually do in order to confuse people when a Democrat acts dishonestly

What jurisdiction has the authority to regulate inherently global cryptocurrencies? The UN perhaps?

I suppose every federal jurisdiction has an ability to regulate some things about how the currency is used inside their borders (e.g. how exchanges physically located there work and how they have to report),

is the definition of an unregulated currency a currency that no federal jurisdiction anywhere in the world, nor the UN, has regulated explicitly or implicitly yet?

How do you actually ban something that isn't run by any one entity? I guess you can make it illegal to use crypto currency for any exchange by the government controlled entities but that doesn't actually ban Bitcoin or anything else.

The problem for this gentleman is that he doesn't understand HOW it is regulated. Mister Senator feels that it should be centrally regulated by his faction, but, that's not how regulation works in the Bitcoin world. Regulation of Bitcoin is done through protocol consensus, it's entirely based on the individual users and stakeholders who are actively part of the Bitcoin network. This is a truly strange argument against Bitcoin, because Bitcoin is neither anonymous nor unregulated. It's pseudonymous and uses

Bitcoin and the others aren't anonymous. Not when everyone has access to the record of every transaction. Just because they don't have names on them doesn't mean anything. All law enforcement has to do is figure out the people involved in one transaction and they can start tracking their way back through all of them.. unlike normal cash.

With the amount of information that DHS has on all of us they should have no problems doing this. Makes me kind of wonder about the identiy of Satoshi Nakomoto.

You're suffering a fundamental misunderstanding of the Bitcoin protocol. The entire currency as it stands at any point in time is contained within the blockchain. Every single minting of a coinbase, and every single transaction ever made; from where, to where, at what point, how much etc. Also, AML already demands exchanges to able to supply identification for each account that ever does a BTCfiat exchange.

The argument goes, although I don't necessarily agree with it's validity, that given the frequency with which you seem to regularly hear about any single specific "unregulated currency" being used as a money laundering system by criminals, that said specific currency is problematic by association.... What I take from this is that as long as any single unregulated medium of exchange does not become too ubiquitously used or popular, illegal activity is diluted across all of them, and falls under the radar of

Anyone who is Christian and believes what's in Revelations, should be against regulating money. T

I disagree with you. I assume you are serious and are referring to the antichrist controlling all buying and selling during the tribulation in an effort to get people to take the mark of the beast. If so, I'd like to point out something to you..

First, it's going to happen and there is nothing you can do about it. You cannot change prophecy, or adjust the fulfillment of it so why are you up in arms over this? It's out of your control.